AN ACT RELATIVE TO THE UNIFORM TRANSFER ON DEATH SECURITY REGISTRATION ACT.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
The General Laws are hereby amended by inserting after chapter 201D the following chapter:-
CHAPTER 201E. UNIFORM TRANSFER ON DEATH SECURITY REGISTRATION ACT.
PART 1. SHORT TITLE, DEFINITIONS, APPLICABILITY.
Section 101. (1) This chapter shall be known as and may be cited as the Uniform Transfer on Death Security Registration Act.
(2) This chapter shall be liberally construed and applied to promote its underlying purposes and policy and to make uniform the laws with respect to the subject of this chapter among states enacting it.
(3) Unless displaced by the particular provisions of this chapter, the principles of law and equity supplement its provisions.
Section 102. As used in this chapter the following words shall unless the context otherwise requires have the following meanings:-
"Beneficiary form", a registration of a security which indicates the present owner of the security and the intention of the owner regarding the person who will become the owner of the security upon the death of the owner.
"Devisee", a person designated in a will to receive a disposition of real or personal property.
"Heir", a person, including a surviving spouse, who is entitled under the statutes of intestate succession to the property of a decedent.
"Person", an individual, a corporation, an organization, or other legal entity.
"Personal representative", an executor, administrator, successor personal representative, special administrator, or a person who performs substantially the same function.
"Property", real and personal property or any interest therein and means anything that may be the subject of ownership.
"Register", to issue a certificate showing the ownership of a certificated security or, in the case of an uncertificated security, to initiate or transfer an account showing ownership of securities.
"Registering entity", a person who originates or transfers a security title by registration, and includes a broker maintaining security accounts for customers and a transfer agent or other person acting for or as an issuer of securities.
"Security", the same meaning as provided in clause (k) of section 401 of chapter 110A and includes a security account.
"Security account", (i) a reinvestment account associated with a security, a securities account with a broker, a cash balance in a brokerage account, cash, interest, earnings, or dividends earned or declared on a security in an account, a reinvestment account, or a brokerage account, whether or not credited to the account before the owner's death, or (ii) a cash balance or other property held for or due to the owner of a security as a replacement for or product of an account security, whether or not credited to the account before the owner's death.
"State", any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the authority of the United States.
Section 103. Only individuals whose registration of a security shows sole ownership by one individual or multiple ownership by two or more with rights of survivorship, rather than as tenants in common, may obtain registration in beneficiary form. Multiple owners of a security registered in beneficiary form hold as joint tenants with rights of survivorship, or tenants by the entireties, and not as tenants in common.
Section 104. A security may be registered in beneficiary form if the form is authorized by this chapter or a similar law of the state of organization of the issuer or registering entity, the location of the registering entity's principal office, the office of its transfer agent or its office making the registration, or by this chapter or a similar law of the state listed as the owner's address at the time of registration. A registration governed by the law of a jurisdiction in which this chapter or similar law is not in force or was not in force when a registration in beneficiary form was made is nevertheless presumed to be valid and authorized as a matter of contract law.
Section 105. A security, whether evidenced by certificate or account, is registered in beneficiary form when the registration includes a designation of a beneficiary to take the ownership at the death of the owner or the deaths of all multiple owners.
Section 106. Registration in beneficiary form may be shown by the words "transfer on death" or the abbreviation "TOD", or by the words "pay on death" or the abbreviation "POD", after the name of the registered owner and before the name of a beneficiary.
Section 107. The designation of a transfer on death beneficiary on a registration in beneficiary form shall have no effect on ownership until the owner's death. A registration of a security in beneficiary form may be canceled or changed at any time by the sole owner or all surviving owners without the consent of the beneficiary.
PART 2. SURVIVOR RIGHTS.
Section 201. On death of a sole owner or the last to die of all multiple owners, ownership of securities registered in beneficiary form passes to the beneficiary or beneficiaries who survive all owners. On proof of death of all owners and compliance with any applicable requirements of the registering entity, a security registered in beneficiary form may be reregistered in the name of the beneficiary or beneficiaries who survived the death of all owners. Until division of the security after the death of all owners, multiple beneficiaries surviving the death of all owners hold their interests as tenants in common. If no beneficiary survives the death of all owners, and if no anti-lapse statute applies, the security belongs to >he estate of the deceased sole owner or the estate of the last to die of all multiple owners.
PART 3. REGISTRATION IN BENEFICIARY FORM, TRANSFER ON DEATH.
Section 301. (a) A registering entity is not required to offer or to accept a request for security registration in beneficiary form. If a registration in beneficiary form is offered by a registering entity, the owner requesting registration in beneficiary form assents to the protections given to the registering entity by the provisions of this chapter.
(b) By accepting a request for registration of a security in beneficiary form, the registering entity agrees that the registration will be implemented on death of the deceased owner as provided in this chapter.
(c) A registering entity is discharged from all claims to a security by the estate, creditors, heirs, or devisees of a deceased owner if it registers a transfer of the security in accordance with section 201 and does so in good faith reliance (i) on the registration, (ii) on the provisions of this chapter, and (iii) on information provided to it by affidavit of the personal representative of the deceased owner, or by the surviving beneficiary or by the surviving beneficiary's representatives, or other information available to the registering entity. The protections of this chapter shall not extend to a reregistration or payment made after a registering entity has received written notice from any claimant to any interest in the security objecting to implementation of a registration in beneficiary form. No other notice or other information available to the registering entity shall affect its right to protection under this chapter.
(d) The protection provided by this chapter to the registering entity of a security shall not affect the rights of beneficiaries in disputes between themselves and other claimants to ownership of the security transferred or its value or proceeds.
Section 302. (a) A transfer on death resulting from a registration in beneficiary form shall be effective by reason of the contract regarding the registration between the owner and the registering entity and by reason of this chapter and is therefore not testamentary.
(b) This chapter shall not limit the rights of creditors of security owners against beneficiaries and other transferees under other laws of the commonwealth.
PART 4. TERMS, CONDITIONS AND FORMS, RIGHTS OF CREDITORS.
Section 401. (a) A registering entity offering to accept registrations in beneficiary form may establish the terms and conditions under which it will receive requests (i) for registrations in beneficiary form, and (ii) for implementation of registrations in beneficiary form, including requests for cancellation of previously registered transfer on death beneficiary designations and requests for reregistration to effect a change of beneficiary. The terms and conditions so established may provide for proving death, avoiding or resolving any problems concerning fractional shares, designating primary and contingent beneficiaries, and substituting a named beneficiary's descendants to take in the place of the named beneficiary in the event of the beneficiary's death. Substitution may be indicated by appending to the name of the primary beneficiary the letters LDPS, standing for "lineal descendants per stirpes". This designation substitutes a deceased beneficiary's descendants who survive the owner for a beneficiary who fails to so survive, the descendants to be identified and to share in accordance with the law of the beneficiary's domicile at the owner's death governing inheritance by descendants of an intestate. Other forms of identifying beneficiaries who are to take on one or more contingencies, and rules for providing proofs and assurances needed to satisfy reasonable concerns by registering entities regarding conditions and identities relevant to accurate implementation of registrations in beneficiary form, may be contained in a registering entity's terms and conditions.
(b) The following are examples of registrations in beneficiary form which a registering entity may authorize:
(1) Sole owner-sole beneficiary: John S. Brown TOD, or POD, John S. Brown Jr.
(2) Multiple owners-sole beneficiary: John S. Brown Mary B. Brown JT TEN TOD John S. Brown Jr.
(3) Multiple owners-primary and secondary or substituted beneficiaries: John S. Brown Mary B. Brown JT TEN TOD John S. Brown Jr. SUB BENE Peter Q. Brown or John S. Brown Mary B. Brown JT TEN TOD John S. Brown Jr. LDPS.
Section 402. (a) If other assets of the estate are insufficient, a transfer resulting from registration under this chapter shall not be effective against the estate of a deceased party to the extent needed to pay claims against the estate and statutory allowances to the surviving spouse and children.
(b) A surviving party or beneficiary who receives payment of a security registered in accordance with this chapter shall be liable to account to the personal representative of the decedent for a proportionate share of the amount received to which the decedent, immediately before death, was beneficially entitled to the extent necessary to discharge the claims and allowances described in subsection (a) remaining unpaid after application of the decedent's estate. A proceeding to assert the liability may not be commenced unless the personal representative has received a written demand by the surviving spouse, a creditor, a child, or a person acting for a child of the decedent. The proceeding shall be commenced within one year after death of the decedent. Sums recovered by the personal representative shall be administered as part of the decedent's estate.